Employee Turnover in Commercial Banks

Categories: BankBusiness

According to Ruth Mayhew (2019), Employee turnover refers to the number or percentage of workers or employees who leave an organization and are replaced by new employees. He discussed employee termination for poor job performance, absenteeism or violation of workplace policies is called involuntary turnover " also referred to as termination, firing or discharge. It's involuntary because it wasn't the employee's decision to leave the company. Layoffs could also be considered involuntary terminations, though layoff procedures usually are handled differently from termination. Some layoffs have certain federal and state provisions that aren't afforded to employees who are fired because of performance or policy violations.

Further he implied that when an employee leaves the company of his/her own volition, it's called voluntary termination. Employees give a number of reasons for leaving their jobs. They may be accepting employment with another company, relocating to a new area or dealing with a personal matter that makes it impossible to work. When an employee voluntarily terminates the employment relationship, he/she generally gives the employer verbal or written notice of intent to resign from his/her job.

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This study recommends undertaking further research into the link between employee satisfaction and their job performance in a controlled setting. This study also explores some sound retention strategies on how an organization can retain employees and minimize the rate of turnover. Employee turnover is the rotation of workers around the labour market, between firms, jobs and occupations, and between the states of employment and unemployment (Abassi & Hollman, 2000). Staff turnover that can occur in any organization might be either voluntary or involuntary.

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Voluntary turnover refers to termination initiated by employees while involuntary turnover is the one in which employee has no choice in the termination as it might be due to long term sickness, death, moving overseas, or employer-initiated termination. (Heneman, 1998). Shaw, Gupta & Delery (2002) found empirically that voluntary turnover was associated with the interior organisation performance. (Harkins, 1998) explains employee's job turnover as the access to enter new employees into the organizations and the departure of current employees of the organizations.

Departure term of existing employees used by the researchers interchangeably with controlled exit or separation. (Mobley, Griffeth, Hand, & Meglino, 1979) explained the turnover rate as to replace resigned employees with hiring new recruitments. By explaining these, employees, turnover occurs when a substitute is hired successfully. Another definition provided by (Mondy, 2010) who explains that employee turnover means controlled ending of a partnership with the organization by the employees of that organization. In business circles, employee turnover is widely used term (Henry, May 2007). (Mathis & Jackson, 2007) said that those employees who are in the organization have to put extra efforts and have to work extra hours to balance the work of those who left the organization. Increased workload of employees leads to decrease employee morale and increase stress level, which increases employee absenteeism. According to Reggio (2003), employee turnover refers simply to the movement of employees out of an organization.

The concept of labour turnover is often used interchangeably with employees' turnover. It means the rate at which employees leave a business enterprise (Hedwiga, 2011). It represents the relative rate at which a business enterprise gains or losses its employees (Marisoosay, 2009). Kazi and Zedah (2011) describe employees' turnover as the regular change of employees around the employment market among organizations, professions and career; and between the conditions of full employment and that of being without a job. According to Price (1977) employee turnover is the ratio of the number of organizational members who have left during the period being considered divided by the average number of people in that organization during the period. The seeds or initial causes of turnover, arising out of the frustration related to budget cutting, hiring freezes, layoffs, and lack of development funds and opportunities, are more likely to be sown at such times. As defined by Farlex (2015) the term employee turnover refers to the ratio between the employees that needs to be replaced over given period of time over the average number of employees.

The basis of employee replacement maybe due to resignation, retirement, death and/or interagency transfer. Employees are important assets of any organization, whether business or non-profit. Several experts discribed the role played by employees in creating competitive advantage for the organization (Lepak & Gowan, 2008; Pfeffer, 1994).Even though several research studies have been organized on turnover topic, most researchers focus on the roots of employee turnover, but few studies have been conducted in the examination of sources of employee turnover, guiding various strategies and effects which are helpful for managers in different organizations to make sure that there is continuity of employees in the organizations to improve organizational effectiveness. Therefore the main aim of this study is to find out the various causes and influential factors of employee turnover in commercial bank and related various business organization. Based on past studies, this research has been performed nationally and globally to uncover a variety of factors in relation with employee turnover affecting the industry for their productivity. It will help human resource manager of the Nabil Bank or other similar business organizations to identify the causes of employee turnover and design the appropriate strategies to minimize the turnover.

In order to achieve the above objectives, this study has following research questions:

  1. What cause employee turnover in commercial banks?
  2. How has employee's turnover impact on Nabil bank?

Objective of the study

The main objective of this research is to find out the total employee turnover of the Nabil bank over the years and find the actual gap. It can also be done to show if there is combined relationship between employee turnover and the various factors that may directly or indirectly affect the employee turnover such as; organizational culture, pay scale, employee satisfaction and performance appraisal. It helps to identify the employee mental level satisfaction and tension that causes employee's turnover and tries to solve the problems accordingly by using different methods and techniques. This research also tends to know how Nabil bank gives benefit to employees and how they do the evaluation of the employee's performance. It also helps to know the organizational culture of Nabil bank that effect on the employee turnover. Moreover this research or study helps to determine factors leading to employee turnover and recommends or suggests useful solutions to retain workforce.Therefore, this study can be used by different organizations and firms which are facing similar problems. They may calculate employee turnover rates to identify the major factors causing the turnover and find out the solutions regarding the problems. This research can be helpful for management because this research helps organizations to get lots of knowledge of employee about retention and find out the main reason of leaving the organisation. It can be helpful for employees as it motivates employees of the company and increases employee's interest towards the job.

Scope of the study

The research paper is focused on the total rate or number of employee turnover of Nabil bank. The objective of the research is to find out actual rate of employees who are leaving the bank and the reason behind employee's turnover. The main aim of this research is to investigate various factors affecting employee turnover that can be used to minimize employee turnover in the banking sector. This research will be carried out within the Nabil bank and it will be covered all the employees who are currently working at Nabil bank.

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Employee Turnover in Commercial Banks. (2019, Aug 20). Retrieved from http://studymoose.com/employee-turnover-in-commercial-banks-essay

Employee Turnover in Commercial Banks
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